scholarly journals External borrowing, capital formation and growth in developing countries

1984 ◽  
Vol 19 (1) ◽  
pp. 16-23
Author(s):  
Rainer Erbe
Keyword(s):  
Developing Countries ◽  
Capital Formation ◽  
External Borrowing

From Subsistence to Advanced Material Production

2015 ◽  
pp. 697-712
Author(s):  
G.P. Manish ◽  
Benjamin Powell
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Economic Development ◽  
Development Economics ◽  
Time Preference ◽  
Capital Formation ◽  
Central Planning ◽  
Economic Calculation ◽  
Advanced Material ◽  
Austrian Theory

This chapter provides a summary of the lessons that the Austrian theory of capital holds for the field of development economics. It provides an introduction to the concepts of the structure of production and time preference and a brief overview of how the rate of time preference limits both the available pool of savings and the extent of capital formation. The implications that this uniquely Austrian insight holds for the theory of economic growth are spelled out, in particular the fact that what constrains the growth of developing countries is not the availability of technology but the availability of savings to undertake investment. The chapter also provides a brief exposition of the concept of capital heterogeneity and its implications for the impossibility of economic calculation under a system of central planning. A critique of some popular models that advocate planning as a means of economic development is also provided.

scholarly journals Implications of Public External Debt for Social Spending: A Case Study of Selected Asian Developing Countries

2015 ◽  
Vol 20 (1) ◽  
pp. 71-103
Author(s):  
Sadia Shabbir ◽  
Hafiz M. Yasin
Keyword(s):  
Developing Countries ◽  
External Debt ◽  
The Philippines ◽  
Social Spending ◽  
Social Sector ◽  
Scarce Resources ◽  
General Method Of Moments ◽  
Development Spending ◽  
External Borrowing ◽  
The Impact

For developing countries with budgetary and balance-of-payments gaps to meet, maintaining large stakes of external debt is not free of cost. Highly indebted countries have to set aside a sizeable fraction of their scarce resources to service their debt, which naturally affects their development spending in general and allocations for the social sector in particular. This study examines the behavior of seven developing Asian countries and analyzes the impact of public external debt on social sector spending. The panel dataset includes Pakistan, India, Bangladesh, Sri Lanka, Nepal, the Philippines, and Indonesia, and spans the period 1980–2010. Our empirical analysis is based on three interrelated equations for different spending categories, which are estimated using the general method of moments. The study’s results confirm the common wisdom that outstanding external debt and its servicing liability have an adverse impact on public spending, particularly on social sector spending. This suggests that developing countries need to mobilize their own resources and minimize their dependence on external borrowing as far as possible.

Unveiling de Soto's mystery: property rights, capital formation, and development

2008 ◽  
Vol 4 (3) ◽  
pp. 299-325 ◽  
Author(s):  
CARRIE B. KEREKES ◽  
CLAUDIA R. WILLIAMSON
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Property Rights ◽  
Economic Performance ◽  
Capital Formation ◽  
The Poor ◽  
Insecure Property Rights ◽  
Hernando De Soto

AbstractHernando de Soto attributes the poor economic performance of developing countries to insecure property rights. When property rights are not well-defined individuals do not have the incentives to invest in capital, and assets cannot be used as collateral, hindering capital formation and economic growth. This paper tests de Soto's hypothesis empirically by examining how the security of property rights impacts wealth, collateral, and capital formation across nations. Using several different measures and model specifications, we find support for de Soto's conjecture. Our results suggest that better defined property rights would result in substantial improvements in capital formation and economic growth in developing countries.

scholarly journals The Relationship between Economic Growth and Human Capital in Developing Countries

2013 ◽  
Vol 5 ◽  
pp. 55-62 ◽  
Author(s):  
Mohsen Mehrara ◽  
Maysam Musai
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Formal Education ◽  
Panel Cointegration ◽  
Capital Formation ◽  
Cointegration Analysis ◽  
Point Of View ◽  
Variable Model ◽  
Long Run ◽  
Educational Investments

This paper investigates the causal relationship between education and GDP in developing countries by using panel unit root tests and panel cointegration analysis for the period 1970-2010. A three-variable model is formulated with capital formation as the third variable. The results show a strong causality from investment and economic growth to education in these countries. Yet, education does not have any significant effects on GDP and investment in short- and long-run. It means that it is the capital formation and GDP that drives education in mentioned countries, not vice versa. So the findings of this paper support the point of view that it is higher economic growth that leads to higher education proxy. It seems that as the number of enrollments raise, the quality of the education declines. Moreover, the formal education systems are not market oriented in these countries. This may be the reason why huge educational investments in these developing countries fail to generate higher growth. By promoting practice-oriented training for students particularly in technical disciplines and matching education system to the needs of the labor market, it will help create long-term jobs and improve the country’s future prospects.

scholarly journals Brain Drain and Human Capital Formation in Developing Countries: Winners and Losers

2008 ◽  
Vol 118 (528) ◽  
pp. 631-652 ◽  
Author(s):  
Michel Beine ◽  
Fréderic Docquier ◽  
Hillel Rapoport
Keyword(s):  
Developing Countries ◽  
Human Capital ◽  
Brain Drain ◽  
Capital Formation ◽  
Human Capital Formation

scholarly journals The Impact of Global Innovation on Economic Growth in Developing Countries

2020 ◽  
Vol 9 (2) ◽  
pp. 373
Author(s):  
Saleh Abdul Mola Al-Zaroog ◽  
Amer Abdul Fatah Baqir
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Labor Force ◽  
Trade Openness ◽  
Optimal Investment ◽  
Capital Formation ◽  
Global Innovation ◽  
Fixed Capital Formation ◽  
Innovation Output ◽  
The Impact

The study aimed at identifying the effect of innovation on economic growth in developing countries, relying on it determinants, namely fixed capital formation, labor force, trade openness and the global innovation index (GII). The study relied on panel data for 32 developing countries covering the period (2011-2018). The FMOLS methodology was adopted to estimate the relationships between the above Mentionedvariables. The study disclosed a positive and statistically significant relationship between economic growth and each offixed capital formation, labor force and the global innovation index (GII). However, trade openness was statistically insignificant. The reached several conclusion regarding the efficiency of innovation to enhance growth such as, creating a suitable environment for institutions to work in, enhancing the effectiveness of education, increasing expenditure on scientific research, optimal investment in human capital, freeing markets, encouraging the increase in the size of business and innovation output also . The study recommended that developing countries should focus intensely on translating innovation policies into national strategies, which can have a positive effect on economic growth.

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